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NATIONAL REPORT — For a convenience store retailer, partnering with a well-known foodservice brand can provide a boost in visibility, resulting in increased foot traffic and greater total rings.
In order to maximize profits, it is important that both parties — the branded foodservice partner and the retailer (who is often a franchisee) — work together in harmony for the partnership to function at top efficiency.
Step one for the c-store retailer is to find the right foodservice partner.
“You don’t see a lot of fried chicken franchises in c-stores in the Providence, [Rhode Island] market, but you’ll see a lot of them in the South. Pick something that’s strong in your region, and make sure that it’s a strong franchisor,” said Leo Vercollone, president of VERC Enterprises Inc., a Duxbury, Mass.-based chain of 26 convenience stores and car washes in eastern Massachusetts and southern New Hampshire. Vercollone was Dunkin’ Donuts’ first convenience store franchisee in the United States.
There is some debate as to which model works best for marketing a branded foodservice operation in a convenience-store environment: the “store-within-a-store” approach, or separate entities with easy back-and-forth access.
Ryan Krebs, director of foodservice at Rutter’s Farm Stores, a York, Pa.-based convenience store chain with more than 60 locations throughout central Pennsylvania, feels the best strategy is to leverage the branded foodservice partner and c-store on the same property, but with separate entrances. “Maybe a small corridor leading from one to the other, but not a so-called ‘store-within-a-store,’” he said.
While Rutter’s itself does not participate in a branded foodservice partnership — opting instead for a wholly proprietary foodservice program — Krebs feels this strategy is the best way to maximize the effectiveness of store branding for c-stores that do.
“If your customers see a Subway right in your footprint, they might not bother to even look at your sandwiches or roller grill,” Krebs reasoned. “Having a foodservice partner on the property but right next door allows the c-store operator to have its own identity.”
On the other side of the debate, Tom Cook, principal at King-Casey, a Westport, Conn.-based restaurant, foodservice and retail consulting, branding and design firm, feels the best practice is for a c-store operator to integrate the branded foodservice partner physically into the store.
“The integration of the concepts offers impulse purchase opportunities for both,” Cook noted, adding that this method also creates opportunities to cross-merchandise. “For example, Subway’s foodservice offerings could be merchandised in the cold beverage section of the c-store.”
Alex Neville, director of international operations for Kahala Brands, which counts Blimpie among its stable of restaurant franchise brands, believes branded foodservice can be successful either within the store or as an adjacent restaurant. Either way, he said a key element to success is creating a distinct and noticeable presence for the branded foodservice partner.
“The customer’s eyes need to be drawn to the [branded partner’s] space, so it’s important that the brand’s identity be distinct from the convenience store’s,” Neville advised. In terms of signage and display, “the brand’s colors, textures and standards should be present to draw in the customer and provide instant brand recognition.”
While a branded foodservice program should be a component of the retailer’s overall messaging and product line offerings, it will most often require its own marketing plan as well. A branded foodservice partner should provide c-stores with easy access to point-of-sale and promotional materials, product information, and preparation and equipment guidelines.
A foodservice partnership should also always include an extensive training program to equip the franchisee with the knowledge and tools they need to be successful.
Retailers, too, must consider startup fees and percentages paid to their potential partners when shopping around for branded foodservice programs, pointed out Tim Powell, vice president of Q1 Consulting, a Chicago-based foodservice consultancy.
“C-stores need to analyze their prospective branded partner’s track record on staff training and retraining, distribution partnerships and sourcing, product innovation, merchandising, visits from regional and district managers, suggestions for menu offerings, and pricing in a specific location and consumer insights,” Powell said.
Look in the April issue of Convenience Store News for more on branded foodservice partnerships.